1. Strategic Management Environmental Analysis Prof.Dr. E.Vatchkova

2. Contents Environmental influences Environmental influences The PESTEL framework The PESTEL framework Environmental factors and components Environmental factors and components Environmental dimensions Environmental dimensions The five forces framework The five forces framework SWOT SWOT

3. STRATEGY WHAT DO WE DO? ENVIRONMENT WHAT IS POSSIBLE? OBJECTIVES WHAT DO WE WANT? RESOURCES WHAT DO WE HAVE? 1 3 4 2

4. The PESTEL framework - six main types of influences J&Sh, 2002 Political Political Economic Economic Sociocultural Sociocultural Technological Technological Environmental Environmental Legal Legal

5. Political Government stability Government stability Taxation policy Taxation policy Foreign trade regulations Foreign trade regulations Social welfare policies Social welfare policies

6. Economic Business cycles Business cycles GNP trends GNP trends Interest rates Interest rates Money supply Money supply Inflation Inflation Unemployment Unemployment Disposal income Disposal income

7. GDP growth (source: NSI)

8. Dynamics of direct foreign investments (mill., Source: BNB0)

9. Unemployment level (% of economic active population, Source: Employment agency)

10. Average salary by economic sectors (source: NSI)

11. Real incomes increase level 2000-2005 (Source: ISSR)

12. Territorial unemployment level

13. Sociocultural Population demographics Population demographics Income distribution Income distribution Social mobility Social mobility Lifestyle changes Lifestyle changes Attitudes to work and leisure Attitudes to work and leisure Consumerism Consumerism Levels of education Levels of education

14. Technological Government spending on research Government spending on research Government and industry focus on technological effort Government and industry focus on technological effort New discoveries/development New discoveries/development Speed of technology transfer Speed of technology transfer Rates of obsolence Rates of obsolence

15. Environmental Environmental protection laws Environmental protection laws Waste disposal Waste disposal Energy consumption Energy consumption

16. Legal Monopolies legislation Monopolies legislation Employment law Employment law Health and safety Health and safety Product safety Product safety

17. Drivers of globalization Global market convergence Global market convergence Cost advantages Cost advantages Global competition Global competition Government influence Government influence

18. Interdependence Competitors global High exports/imports Trade policies Technical standards Host government policies Scale economies Sourcing efficiencies Country specific costs High product development costs Similar customer needs Global customers Transferable marketing Global strategies Global market convergence Government influence Global competition Drivers of globalization J&Sh,2002 Cost advantage

19. Environmental dimensions Aldag, Stearns,1987 MunificenceReachlean DynamismStableUnstable ComplexityHomogeneousHeterogeneous ConcentrationConcentratedDispersed Turbulence Low interconnection High interconnection ConsensusConsensusDissensus

20. Organizational adaptation (coping strategies) Buffering Buffering Smoothing Smoothing Forecasting Forecasting Rationing Rationing Boundary spanning Boundary spanning Structural complexity Structural complexity Managerial succession Managerial succession

21. Environmental control Establishing favorite linkages Establishing favorite linkages Manipulating the environment Manipulating the environment

22. Establishing favorable linkages Mergers and/or acquisitions Mergers and/or acquisitions Joint ventures Joint ventures Interlocking directorates Interlocking directorates Executive recruitment Executive recruitment Advertising Advertising

23. Manipulating the environment Change domains Change domains Lobbying Lobbying Trade associations Trade associations

24. SWOT ANALYSIS DIAGRAM Numerous Environmental Opportunities Major Environmental Treats Critical Internal Weaknesses Substantial Internal Strengths QUADRANT ||QUADRANT | QUADRANT |VQUADRANT |||

25. Forces Affecting Industry Competition Suppliers Bargaining Power of Suppliers Buyers Bargaining Power of Buyers Substitutes Treat of Substitute Products or Services Potential Entrants Treat of New Entrants Industry Competitors Rivalry among Existing Firms

26. TANK YOU !